AFP/Washington
The International Monetary Fund and International Monetary and Financial Committee the World Bank were to hold talks late yesterday about aid to Arab countries whose economies have suffered as their people push ahead with democratic reforms. The (IMFC), the IMF’s 24-nation steering panel, is to hold its twice-yearly meeting in the morning. Then the Development Committee, which advises the IMF and the World Bank on aid to developing countries, will meet later in the day. The top-level talks come as finance ministers and central bank governors from the 187 member nations of the Bretton Woods institutions hold their annual spring meetings in Washington.The IMFC was directly affected by the pro-democracy turmoil that swept the Arab crescent this year and toppled governments in Tunisia and Egypt. Until February it was headed by Egyptian Finance Minister Youssef Boutros-Ghali, who was obliged to step down after he was fired, along with half the government, by then-president Hosni Mubarak in Cairo.A week later, Mubarak was ousted by popular revolt. The IMFC chairmanship went to Singapore Finance Minister, Tharman Shanmugaratnam.The post-revolution period in Egypt and Tunisia and aid to other Arab countries swept by protests seeking social justice and better economic futures has been the centre of attention in Washington since Thursday.France, this year’s president of the Group of 20 major economies, and the US announced on Thursday a “joint action plan” for five international financial institutions to aid development in the Middle East and North Africa. The IMF was tasked with providing an economic evaluation of the countries potentially involved, initially seen as Tunisia and Egypt. According to AFP estimates, the oil-exporting Arab countries are benefiting from surging oil prices. But those that import oil were forecast to have 2011 economic growth of about 2%, far too weak to create jobs for rapidly growing populations faced with high energy and food prices. IMF Managing Director Dominique Strauss-Kahn pointed out on Friday that certain sources of revenue, such as tourism, could decline from last year’s levels due to the political turmoil. “We’re here to help,” Strauss-Kahn said. “We can together build a better future for these countries. And that’s not only important for Egypt and Tunisia, it’s important for the whole world because this example is an example that is going to have a lot of consequences,” he said. The IMF chief said the institution was ready with aid if asked. But Tunisia and Egypt have so far not done so. The IMF, which has sent staff mission to Tunis and Cairo, is at this stage still evaluating the situation. And the Tunisian and Egyptian delegations in Washington are looking first to other sources of financing. Tunisian authorities negotiating with a number of countries and development agencies at this point “have not yet seen any additional financing needs that need to be met from the Fund,” Masood Ahmed, IMF director for the Middle East and Central Asia, said Friday. Egypt is consulting with the IMF and is studying its financing options “before making a firm decision whether and what kind of financing they might need from us,” Ahmed said. Beyond financial questions, the anger on the street has pushed the world’s economic leaders to rethink their priorities and their models. “In its economic dimensions, the upheaval in the Mena region is not only a reflection of discontent over jobs, low wages and poverty, but also represents a day of reckoning for trade and economic policy choices made in the region over past decades,” the secretary general of the UN Conference on Trade and Development, Supachai Panitchpakdi, said in a statement to the IMFC.